Improvement in global commercial property transactions set to accelerate in 2010, report shows

Worldwide commercial property transaction volumes began recovering in the second half of 2009 reversing a downward trend, according to the latest analysis from consultants Jones Lang LaSalle.

Its Global Real Estate Capital Flows Update expects the improvement to continue although it will be uneven. Overall analysts anticipate a 30 to 40% increase in direct commercial real estate investment volumes. The Americas, coming from a low base, may be poised to see the largest growth at 50 to 60% while growth in Asia Pacific is projected as 30 to 50%. Europe is expected to only see growth of 20 to 30%.

The report also points out that on a full year basis, 2009 global transaction volumes fell to $US 209 billion, down 45% on 2008. The rate of global volume decline slowed as the drop in 2009 was less pronounced than in 2008 when volumes were down 50% compared with the previous year. At the peak in 2007, global transaction volumes amounted to $US 759 billion.

‘The increase in global transaction volumes that occurred in the second half of 2009 in all regions is an encouraging sign, although full year volumes were below 2003 levels so there is still a long road ahead,’ said Arthur de Haast, head of the firm’s International Capital Group.

In Europe, total transaction volumes in 2009 finished the year at $US 98billion, a 41% decline from 2008 and a 71% decline from the market peak. Asia Pacific, where there was less exposure to the debt crisis, there was a 23% decline in total volumes in 2009, down to $US 66 billion, and a 46% decline from the market peak.

The Americas faced harsh market realities with 2009 volumes down 64% to $US 45 billion, an 85% from the market peak in 2007. For the first time, the Americas fell behind Asia Pacific in global transaction volumes, accounting for just 22% of total global volumes.